Winter is the “last straw” for many vendors tired of waiting for their house to sell, who are instead taking a rest from the market.
Harcourts agent David Ding, who covers Glenfield on Auckland’s North Shore, told OneRoof offers were still being made but the gap between what vendors wanted and what buyers were willing to pay was not being breached.
His comments come as an analysis of residential listings on Oneroof.co.nz suggests sellers have soured on the market in the last two months, with falling prices and longer sale periods keeping potential vendors on the sidelines.
Buyers are still there, but not in the numbers sellers would like. An extra 61,198 homes hit the market in the first six months of the year, but total sales over the same period numbered just over half of that, at 32,407.
Start your property search
Figures released by the Real Estate Institute of New Zealand this week showed that nationwide residential sales in June were down 25.6% year-on-year and 32.6% month-on-month. In Auckland, the situation was worse. Last month, sales dropped 35% year-on-year and 33.2% month-on-month to 1287 - Auckland's lowest tally for a June month since records began.
The analysis points to a stark turnaround in Kiwis' enthusiasm to sell. The drop-off in new listings quickened in June, with the fall between May and June accelerating to more than 20%.
The vendor retreat appears sharper in Wellington City, where the drop-off between April and May was 17%, and another 27% between May and June.
Vendors in Auckland have taken longer to wake up to market realities, with the steep fall in new listings only evident in June.
While the numbers suggest confidence in the market has taken a knock, new listings for June this year were still 11% up on June last year.
Ding said his own six-month review found there had been around 30% more listings this year.
The majority were from a combination of investors and people leaving for Australia, due to the stress of the ongoing high interest rates.
All listings were getting one or two offers “but the gap is the gap - we just can’t close the deal".
Discover more:
- Derelict mansion linked to alleged crime ring sells for $1.21m
- Kiwi aged 22 reveals how she beat the odds and bought her first home
- Inside NZ's biggest house sale of 2024: How local family fought off international jet-setters
“I guess that’s why we’ve reached a breath point. I think we’ve reached the point where the vendor is thinking ‘oh, my God, we’re sick of this market.’”
Ahead of winter they kept trying to sell, but once winter came they decided not to sell: “This is the last thing to kill the camel."
For some, such as investors, the thinking was that while uncomfortable they could hold on for another six months so were withdrawing from the market rather than get only an average price for their property, he said.
People heading to Australia who could not sell their home were still leaving but renting out the property for six months instead. “So they tried, they know it's winter time, it's time to withdraw from the market,” he said.
As for buyers, they had a fear of overpaying, expecting prices to drop further, but vendors were not cutting prices to meet them.
Ding thinks New Zealand’s market will improve when America starts dropping interest rates, because New Zealand would likely follow.
Reserve Bank of New Zealand Governor Adrian Orr has signalled that interest rates won't come down until inflation is under control. Photo / Getty Images
“When the OCR starts dropping the market will have more confidence.”
Auckland’s Mark Honeybone, of Harcourts Property Ventures, said he had plenty of listings and that there were buyers around but for deals to be done the house had to have no issues and vendors had to be willing to accept where the market was.
“If there are two ticks, they are going to sell the property.”
He did not think winter was a big issue, saying political decisions affected the market more than the seasons, and he said he did not expect the market to pick up much in the next year or so.
In Wellington, Bayleys regional manager Grant Henderson said people in the market were mostly those who had to sell due to financial pressures or who were moving locations.
Sellers who bought in the last five or six years were having to accept they would make a loss on what they would have got for the property a couple of years ago, but he said they were only making a loss on potential profit.
If they were buying and selling in the same market, their buying power was exactly the same.
Henderson agreed those who could hold on were holding on, saying: “We’re getting beaten up too much on price’.”
While interest rate signals were looking better, Henderson did not think rates would come down much and would therefore not have that much impact. “It's a longer road than that. The GFC - Auckland took three years to recover, Wellington took five years to come right.”
Along with the cost of living and job losses, the country was facing “a perfect storm all at once".
“There won’t be any price lifts for quite some time so if you’re looking at buying and selling in the same market, just get into it.”
Henderson told OneRoof the flip side was sales were happening and people were moving into new homes. “There’s one bad news story for 10 good ones if that makes sense.”
- Click here to find properties for sale
